Getting out of Dodge

Louis: Doug, a lot of readers have been asking for guidance on how to know when it’s time to exit center stage and hunker down in some safe place. Few people want to hide from the world in a cabin in the woods while life goes on in the mainstream, but nobody wants to get caught once the gates clang shut on the police state the US is becoming. How do you know when it’s time to go?

Doug: Well, the first thing to keep in mind is that it’s better to be a year too early than a minute too late. David Galland recently read They Thought They Were Free: The Germans, 1933-45, by Milton Mayer. He quoted a passage in his column of last Friday. It goes a long way in explaining why Americans appear to be such whipped dogs today. They’re no different from the Germans of recent memory. For those who missed it, let me quote it:

“You see,” my colleague went on, “one doesn’t see exactly where or how to move. Believe me, this is true. Each act, each occasion, is worse than the last, but only a little worse. You wait for the next and the next. You wait for one great shocking occasion, thinking that others, when such a shock comes, will join with you in resisting somehow. You don’t want to act, or even talk, alone; you don’t want to ‘go out of your way to make trouble.’ … In the university community, in your own community, you speak privately to your colleagues, some of whom certainly feel as you do; but what do they say? They say, ‘It’s not so bad’ or ‘You’re seeing things’ or ‘You’re an alarmist.’

“These are the beginnings, yes; but how do you know for sure when you don’t know the end, and how do you know, or even surmise, the end? On the one hand, your enemies, the law, the regime, the Party, intimidate you. On the other, your colleagues pooh-pooh you as pessimistic or even neurotic… the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes. That’s the difficulty. If the last and worst act of the whole regime had come immediately after the first and smallest, thousands, yes, millions would have been sufficiently shocked… But of course this isn’t the way it happens. In between come all the hundreds of little steps, some of them imperceptible, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and, if you did not make a stand at Step B, why should you at Step C?”

The fact is that the US has been on a slippery slope for decades, and it’s about to go over a cliff. However, our standard of living, while declining, is still very high, both relatively and absolutely. But an American can enjoy a much higher standard of living abroad.

On the other hand, if I were some poor guy in a poverty-wracked country with few opportunities, I’d want to go where the action is, where the money is, now. Today, that means trying to get into the United States. The US is headed the wrong direction, but it’s still a land of opportunity and a whole lot better than some flea-bitten village in Niger.

L: By the time things get worse than some Third-World dictatorship in the US, such a person could have remitted a whole lot of cash back home.

Doug: And you’d have a whole lot of experiences that would give you a competitive edge back where you came from, or in the next place you go to. The one-eyed man is king in the valley of the blind. People have to lose that backward, peasant mentality that ties them to the land of their birth. Sad to say, although the average American has somewhat more knowledge of the world — mainly due to television — his psychology is just as constrained as that of some serf from central Asia or some primitive villager in Africa. It’s all a matter of psychology.

But if you’re not poor, you want to go someplace that is safe, nice — whatever that means to you — and with a lower cost of living. As most readers know, for me that’s Cafayate, Argentina, but one size does not fit all. It needs to be a place you actually enjoy spending some time, with people whose company you enjoy.

L: Fair enough. But our readers want to know if your guru-sense is tingling yet, or how close you think we are to it being too late to leave — or at least too late to leave with any meaningful assets.

Doug: I’m a trend observer. This is one of the advantages of studying history, because it shows you that things like this rarely happen overnight. They are usually the result of trends that build over years and years, sometimes over generations. In the case of the US, I think the trend has been downhill, in many ways, for many years. Pick a time. You could make an argument, from a moral point of view, that things started heading downhill at the time of the Spanish-American War. That was when a previously peaceful and open country first started conquering overseas lands and staking colonies. America was still in the ascent towards its peak economically, but the seeds of its own demise were already sewn, and a libertarian watching the scene might have concluded that it was time to get out of Dodge —

L: [Laughs] That would have been a bit early…

Doug: [Chuckles] Yes, that would have been way too soon…So, when did the slide — politically, economically, and socially — really start for the US? When were there no more trends going up?

L: FDR? The New Deal was really a moral, economic, and political turning point.

Doug: You could make that argument, but the US still grew economically, despite the roadblocks FDR threw in its path. US military power and global prestige continued growing from that point, although, paradoxically, the accelerating growth of the US military was directly responsible for the decline of the US economically and in terms of personal freedom. One reason for the ascendancy of the US after World War II was that we were the only major country in the world not physically devastated by the war.

L: Ah. Right.

Doug: So it seems to me that the peak of American civilization was in the 1960s. As for evidence, well, I like to put my finger on the 1959 Cadillac. Those twin bullet taillights, the opulence of it… In terms of then-current technology, things couldn’t get much better. That was the peak, in my mind. Though things continued getting better for a while, the US started to live out of capital.

L: Had to pay for guns and butter.

Doug: That’s right. The Johnson administration’s so-called Great Society created vast new federal bureaucracies that promised Americans free food, shelter, medical care, education, and what-have-you. Americans became true wards of the state. But the real, final nail in the coffin for America was in 1971 —

L: Nixon taking the US off the gold standard.

Doug: Nixon taking the US off the gold standard — open devaluation of the dollar, combined with wage and price controls for some months. And that was not long after the so-called Bank Secrecy Act, which abolished bank secrecy, and required the reporting of all foreign financial accounts…Since 1971, some things have improved largely due to technological advances, but the America That Was has been fading into the past. It was a decisive turning point. You can see that in the accelerated proliferation of undeclared wars we’ve had since then. I don’t just mean the penny-ante invasions of Granada and Panama — the US has always lorded it over Caribbean and Central American banana republics; those are just sport wars. But Iraq and Afghanistan are alien cultures on the other side of the world — apart from never posing any threat to the US. Now it looks like Iran and Pakistan are on the dance card, and they’re big game. The War Against Islam has started in earnest, and it’s going to end badly for the US. I explained all this at great length in the white paper, Learn to Make Terror Your Friend, that I wrote for The Casey Report last month.
Doug Casey and Louis James
for The Daily Reckoning

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About Doug Casey:

Doug Casey of Casey Research is the author of the best sellers Strategic Investing, Crisis Investing, Crisis Investing for the Rest of the 90’s, and most recently, Totally Incorrect. He has lived in seven countries and visited over 100 more. He has appeared on scores of major radio and TV shows and remains an active speculator in the stock, bond, commodity, and real estate markets around the world. In his spare time, Doug engages in competitive shooting and plays polo.